GOLD

FUNDAMENTALS

Gold futures recovered smartly on Wednesday as buying emerged at lower levels on the wake of recovery in crude oil prices. Slight weakness in dollar against euro also supported the gold prices. COMEX December Gold rose $ 15.70 to end at $814.70 an ounce.

Gold demand rose 19% (Y0Y) in Q3 to 947.2 tonnes on the back of robust inflows into bullion investment funds according to the World Gold Council. Investment in ETFs and similar products hit a quarterly record at 138 tonnes. But gold's rising price slowed jewelry demand for the metal and it grew 6% in tonnage terms. Meanwhile, gold supply was 16% higher than a year earlier at 1,045 metric tons on mining company de-hedging and higher central bank sales, not rising mine output.

Demand in India was 5% higher in tonnage terms in the third quarter than a year earlier at 185.1 tonnes. However, it was down from the previous quarters due to higher prices. India's jewelry and net retail investment demand totaled 200.8 tons in the first quarter and 303.8 tons in the second quarter according to WGC.

Peru’s gold production declined 9% in September to 14.997 tonnes compared with the same month a year before according to the Energy and Mines Ministry.

TECHNICALS

The prices have closed above short and medium term EMAs, which is a positive sign. MACD is running down in positive zone showing decreasing bullish momentum. RSI & Stochastic are rising in neutral region indicating firmness. Gold may trade volatile.

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